NOVEMBER 19, 2004

BAR seeks administration!

British American Racing's parent company British American Racing (Holdings) Ltd. is looking to go into administration. The company is the parent of the important subsidiary British American Racing GP Ltd., which was the company which BAR (Holdings) Ltd. bought from the Tyrrell Family and which is the signatory organization to the Concorde Agreement. The move to administration was decided in an effort to get rid of the minor shareholders in the team, who are rumored to hold around 10% of the stock. However, we understand that things are a little more complicated than it would appear as the company was set up as a joint venture which means that other shareholders still have a voice even if their share capital is limited. Having said that BAT has had to pay a great deal of money into BAR because of the costs incurred in the unsuccessful early years of the team. Most of the debt that BAR owed BAT became equity.

A move into administration means that the original shareholders have not agreed on the deal between BAT and Honda and the intention of the move is to shut the original company, start another without the small shareholders and buy the assets of the company from the administrator. This will presumably dictate the price of the deal but it is unlikely that the small shareholders will be able to bid against Honda and BAT, particularly as the tobacco giant is bound to be the biggest creditor in the business and so will in reality be paying itself.